Considerations for Buying a Small Business
Ever walked into a neighborhood business that was recently purchased? The new ownership might have changed the paint color, décor, and equipment in a flash -- maybe even overnight.
If you’ve ever dreamed of revamping a business you visit frequently, you might be a good match for buying a business. Rather than starting your own company from the ground up, buying an existing business means you can jump right in, get to work and focus on growth.
Before you sign on the dotted line, you may want to consider the following pros and cons of buying a business.
At the same time, many business owners decide to sell their companies because they no longer want to keep up with the day-to-day operations -- and they may have fallen out of good recordkeeping or organizational habits. Stepping in as a new owner is a great time to enact new policies and streamline the way a business runs. If you can enact change in a positive, encouraging manner, your leadership might be just what a business needs to get to the next level.
If you don’t have the capital to buy a business, bootstrapping a business from your own concept and bringing it to life can be just as rewarding as writing a check and settling down at your new desk. But if you have the capital to take over an existing operation, it may be a less stressful experience than starting from scratch. “All of the bugs of the business have probably been ironed out and all of the problems that the business has encountered at the early stage of their development have been resolved,” mentor Norm Silverstein explained on the SCORE Small Business Success Podcast. “Basically, most of the dirty work has been done when you buy an existing business. To me, that's the most advantageous way of doing it, and the least risky.”
If you’re thinking of buying a business, visit a SCORE mentor to learn more about the process and what to expect.
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7 Tips for Starting a Food Business
Starting a food business has to be one of the most challenging businesses to get into. The harsh reality is that most fail within the first year. The restaurant business in notoriously tough, but where there is a will there is often a way! While vision and ambitions are important, turning that ambition into success requires research, planning, capital, business acumen, and perseverance, more research and more planning. Here are some tips that can help entrepreneurs start, operate, and grow their fast food business successfully and within the law.
Do Your Research
The food industry in general is very competitive so it is imperative that you do your research before getting started. Business networking events (such as those operated by Small Business Development Centers, SCORE, and local Chambers of Commerce) offer a great venue for picking the brains of fellow business people. Try to find out what works, what doesn't, and what they would do differently. If you are aware of restaurants that have failed, try to identify why. Online community forums are a great way of gauging market need and customer opinion about local food service businesses.
Doing your research will help you to define your target market, niche opportunity, and identify your greatest risk factors, so that you can build a strong business case and move forward. Whether it's specializing in authentic Chicago deep dish or cupcakes - focus on providing a unique and quality product - don't try to be all things to all people. Be specific!
Consider Starting Small
You should consider testing your idea before you go all out with a pop up location. It will give you an opportunity to run through your idea without all the risk. Many food businesses start as a hobby at home and once they outgrew the space they moved on to something bigger. Going straight from a business plan to the opening a storefront is a big step; the idea is that you have an opportunity to get the kinks out. You can rent a food truck for a month or try a local market just to see how things go. When you do finally make the move to permanent location you can scale up.
Alternatively, fast-food franchises might be an option worth considering for entrepreneurs who are not quite ready to make the leap into full business ownership.
Build a Business Plan
A business plan doesn't have to be an overly formalized document, but going through the process of building and constantly tweaking your plan will help you match the strengths of your business to the opportunities the market presents. It can also help you better deal with threats as they emerge.
A business plan is also essential when it comes to communicating with others - such as customers, partners, and investors - if you want any of these to believe in you, you must be able to convince them that you know what you are talking about when it comes to your business.
Not all businesses need investors to get started, particularly if you start small. However, there are ranges of options from very small microloans that can help smaller fast food outlets get started, to more comprehensive small business loans such as the popular SBA 7(a) and 504 loan programs.
If you are seeking investment, plan it out. Use your business plan and the knowledge you’ve gained from your pop up test as the basis for a loan proposal or investment plan. Investors and lenders will want to know everything about your business idea or venture. Also, be realistic about how much money you need. You can save lots of capital just by buying local produce and purchasing surplus equipment.
Start Your Business the Right Way
Whatever your business type, you must take care of the fundamental regulatory and legal steps involved in starting a business. From tax ID numbers to licensing make sure everything is in order.
Know Your Food Laws and Regulations
This should be part of your research to begin with, but it’s worth making it a one off tip. Know what the laws and regulations are in your state! From labor laws to food safety laws understanding and achieving compliance with legal and regulatory requirements can have a big effect on the success of a food operation big or small.
Find a Business Mentor
Talk to your local SBA office, SCORE, or Small Business Development Center (SBDC). They can give you unrivalled, objective, and FREE advice about the local market and the process of starting a successful business.
Understanding Gross Margin
Ignoring your financial statement is like ignoring the health of your business. Startups and new business owners often overlook understanding gross margin. This can have a direct impact on your ability to effectively manage a growing business, price your products, and most importantly, make a profit.
Gross Margin Overview
The gross margin represents the percent of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services sold. The higher the percentage, the more your business retains on each dollar of sales to service its other costs and obligations.
But gross margin is so much more than that; it is a measure of your production efficiencies and it determines your break-even point. It is a key calculation as you assess your startup business risk and profitability.
The Importance of Knowing Your Gross Margin
Understanding and monitoring gross margins can also help business owners avoid pricing problems, losing money on sales, and ultimately stay in business. If you don’t know what your gross margin is, then making sense of anomalies in your income statements becomes tricky.
Many businesses that appear to be thriving often fail because their prices are too low or their costs are too high and they can’t make a profit. Establishing a low price strategy is tempting, especially when dealing with cutthroat competition – however, it’s rarely sustainable and it can be tough to increase prices later, even with a loyal customer base. Using gross margin calculations and other factors as you plan your business can help you avoid pricing mistakes before it’s too late.
Cost control is another area that can trip up small business owners. It’s surprisingly easy for staff to ignore cost control procedures, which can quickly erode your margins. For example, if higher cost materials have made their way into your production process (and this could be something as simple as a chef using a higher quality food product or making bigger sandwiches in the kitchen than had been budgeted for) – then you have a problem.
Knowing what your gross margin is on every product throughout the life cycle of your business and acting on any variations you detect can help you identify these problems before it’s too late.
How to Calculate Your Gross Margin
Calculating gross margin is easy if you’ve been in business long enough to get some record keeping under your belt, but for startups the process is a little more complex.
Calculating gross margin for an existing business – Start by looking at historical data over a business quarter or year and identifying your company’s total revenue for this period and the costs of goods sold (raw materials and labor).
Gross Margin (%) = (Revenue – Cost of Goods Sold)/Revenue
Calculating gross margin for a startup – If you don’t have any income reports to go by, calculating your potential gross margins involves some research. Consider the following:
- What is the competition doing? If you can, try to find out the gross margins of your competitors or industry averages to benchmark where yours should be. Even if their financial data is not in the public domain, their pricing and your understanding of costs will give you a rough estimate as to where your margins should be.
- Assess your costs and explore ways you can decrease these over time. This should give you an early indication of the profitability of your business. Remember that gross margins change over time through reduced costs and increased efficiencies.
Using Gross Margin to Calculate Product Pricing
While understanding gross margin can help you avoid pricing and cost control nightmares, should you be using it to calculate pricing? Many businesses go this route because it clearly expresses how many of your sales dollars are profit. However, many other factors help determine your pricing strategy, including potential market share, distribution costs, seasonal considerations, perceived value, and more.
How to Become a Street Vendor
Everyone has seen a street vendor at some point and many of us have purchased from him or her. Consider for a moment self-employment and the opportunity to work outdoors with a schedule that is always convenient for you. Becoming a street vendor may seem like a relatively easy process but it does involve organization and patience to acquire the proper licenses and permits and operate it as a legal business.
If you’re a first-time vendor and are unsure at first if you’re ready to commit to street vending and peddling, try selling your general merchandise at local flea markets, holiday markets, and street fairs where, in most cases, only a temporary sales license is necessary. However, if you plan to sell food be prepared for a more in depth application process. The bottom line is no matter what type of business you have; make sure that you meet all the legal standards for your state for a small business.
A flea market is also a great place to test the market. Most cities have a numerous open markets with different demographics, which will allow you to test the waters before you go all in. In addition they are often very established in communities and have a built in following. Once you’ve narrowed down your focus, it would be a great opportunity to build your own following before you venture out.
In addition to customer research a market is a great opportunity to get to know who your competition might be. Due diligence is key especially in the beginning stages.
Licenses and Permits
License and permit requirements for street vendors vary based on location and the items you plan to sell.
You may need to obtain the following permits:
- Sales tax permit from your state government’s revenue agency
- Tax ID number your local government revenue agency
- A general business license from your city or county clerk’s office
- An additional vendor license from your city or county government
You will also need to comply with any general licensing and registration requirements that apply to all businesses in your state.
If you intend to practice food related street vending contact your state or county’s Department of Health which regulates and issues food related licenses and permits. You will likely be required to attend a Food Protection Course for Mobile Food Vendors. The cost of the course ranges from $50 to $75.00 and can take up to four hours over two days.
Before you complete the required legal documents, consider precisely where your business will be located. Laws concerning dates, times, and locations for vendors to operate usually vary by city. Larger cities like New York and Philadelphia have limits on the number of vendors so be sure to check with your city or county government when considering a location for your business. Going back to the flea markets, they are great testing grounds for a more permanent location.
FoodSafety.gov provides federal and state contacts for licensing and food safety information.
How to Start a Retail Business
'Main Street' has now become a generic term synonymous with U.S. small business in general. But for many entrepreneurs, the prospect of joining Main Street in its more literal meaning - i.e. the primary retail street of a village or town - still holds an enormous amount of appeal as a business venture.
Given the right amount of market research, business planning, and financial support, starting a retail business (and joining the more than 24 million people who earn a living this way) can offer many rewards to the right kind of entrepreneur.
But how do you go about starting a retail business?
Here are some steps that you will need to follow (from a business planning, structure, and legal perspective) to open and operate a successful retail operation.
1. Determine which Type of Retail Business Model is Right You
Once you've developed a business plan and have an idea of what it is you wish to retail, you will need to decide which type of retail model is right for you. Traditional choices include store retailing, online retailing, non-store retailing (such as door-to-door sales, mail order, etc.) or a combination of any of these three.
You may also want to consider whether you want to launch your own retail business or buy into a franchise opportunity. Both have advantages and disadvantages (which I won't go into in this post). But, if you consider going down the franchising route, this guide offers helpful advice on buying and evaluating a franchise and tips on how to avoid common scams.
2. Find the Right Location
As a new retail business you definitely need to be where your customers are - and almost certainly need to get it right first time.
The location you choose should dovetail onto the type of retail trade you are starting. For example, a jewelry store might not sit comfortably or profitably in a suburban strip mall, whereas an organic pet food store might. Check local demographics including employment statistics, consumer statistics, and more using these guides from the government.
You'll also need to check local zoning laws, even if you want to operate a home-based retailing business - many local governments restrict what business can be done from home.
Above all, when it comes to location, you'll want to ensure you combine visibility, accessibility, affordability and commercial lease terms that you can live with, through the good times and the bad.
Get more advice and tips from SBA.gov on choosing a business location.
3. Finance your Retail Venture
The entry costs for retail can vary. If your operation is online or home-based you may not need as much access to capital as a Main Street store-based retailer. Either way, you will need funds to support start-up costs such as inventory, fixtures and fittings, marketing and advertising, as well as employee salaries, and so on.
If you don't qualify for traditional bank loans, you might want to look to a government-backed loan. What this means is that the government - through the Small Business Administration (SBA) provides a guaranty to banks and lenders for money lent to small businesses, rather than lending the businesses money directly. Don't even think about a federal government grant as an option -- the government doesn't offer grants to for-profit businesses; there is no such thing as free money.
Read more about SBA loans here.
4. Determine Your Business Structure - Do you want to go it Alone or in Partnership?
It's worth thinking about. If you don't have family or friends who can help out with the day-to-day logistics of running a retail operation, a business partner can help. They can also help share the risk. For more information about business partnerships, as well as other alternative business entities such as corporations, LLCs, etc. - and how to go about setting them up - refer to this information on choosing your business structure.
5. Take Care of the Regulatory Requirements involved in Starting and Operating a Business
It doesn't matter whether you are starting a retail business out of your home or on Main Street, there are several regulatory and legal fundamentals that you must attend to. This is where many small business owners stumble. What laws apply to your specific business; what licenses and permits are required; what happens when you need to hire your first employee?
This very easy to navigate guide - 10 Steps to Starting a Business - (from the government) walks you through the essential steps you must follow to make sure you properly plan, prepare and manage your business.
At the end of the day, talk to those in your community who knows the market and local regulations. There are many resources- including SCORE, local SBA offices, and Small Business Development Centers - that offer free counseling and training programs to help you get started and expand your business. Find help near you here.
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How Color Can Help Boost Your Business
What can color do for your business’s marketing? A better question might be: What can’t it do? According to a recent infographic from Kissmetrics, color can:
- Make your brand more recognizable. Use of color increases brand recognition by 80 percent.
- Get customers to buy a new product. A whopping 93 percent of consumers say “visual appearance” is the primary factor they consider when buying a new product.
- Get customers to buy any product. Some 85 percent of consumers say color is a primary reason why they buy.
Here are some factors to keep in mind when choosing and using color in your marketing materials.
- Be consistent. For best results, you’ll want the colors in your ads, website, packaging and print marketing materials to tie in with the colors in your business logo.
- Consider the format of your marketing materials. For example, if your business has a physical location, you may need a brightly colored or high-contrast store sign to attract the attention of people driving by. If you have an ecommerce or B2B business and most of your marketing is done online, subtler colors might be just as effective.
- Assess the competition. You’ll need to walk a fine line between standing out from your competitors and fitting in with them when it comes to color. For instance, if you own a landscaping service, plant nursery or recycling company, green is a logical color to use because it’s “shorthand” for nature. Purple and hot-pink marketing materials wouldn’t work as well.
Here’s a closer look at what different colors mean in marketing.
Red: Viewing red physically increases people’s heart rate and energizes them. This is why “sale” tags are also in red. You can use red to attract attention (like a stop sign) and create a sense of urgency in prospective customers. Red would not be a good color for a business like a spa or salon that emphasizes relaxation and calm.
Orange: Slightly less aggressive than red, orange is still good at attracting attention and can be used to create a call to action. It’s also currently a trendy color, especially online.
Yellow: Yellow is bright, cheery and optimistic. It’s a good color for grabbing attention without the aggressive edge of red. Yellow has been shown to stimulate thinking and help people generate ideas; it conveys innovation and newness. However, yellow can be overwhelming in large doses, because it’s the most difficult color for the eye to take in.
Overall, warm colors (red, orange and yellow) are stimulating and exciting. They’ve also been shown to make people hungry, which is why so many quick-service restaurants use these colors in their marketing and interiors.
Blue: Blue is most North Americans’ favorite color, which can make it a good choice for marketing materials, but can also make it harder to stand out. Blue creates a sense of calm, security and trust, which is why it’s often used by financial services or healthcare businesses.
Green: Green is the easiest color for the eye to process, so if you want to convey calm and relaxation, it’s a perfect choice. It also symbolizes nature and the environment.
Purple: A regal color, purple combines the energy of red with the calm of blue. It conveys wealth, imagination and femininity (one reason it’s often used in skincare and beauty product marketing).
Pink: Pink is often used to market products targeted at women and girls, but it’s important to make sure your use of pink doesn’t backfire. Slapping pink on product packaging in order to mark it as being “for women” can come off insulting to female consumers.
Black: Black signifies power, sophistication and luxury, which is why it’s often used in marketing luxury cars or fashions. It makes a great contrast with other colors, but too much of it can look overpowering. Avoid using black as a background on print or online marketing materials; it will make text too hard to read.
White: White symbolizes innocence, cleanliness and purity, which is one reason healthcare companies often use it in their marketing. It’s a great background for all kinds of colors. Using a lot of white can come off as very high-tech (think Apple) but also as cold.
Gray: The ultimate neutral, gray conveys security and dependability. Shift it to silver, and it suggests high-tech, glamour or wealth. Pairing with gray is a good way to tone down brighter colors.
Brown: Brown works well for “earthy” businesses such as restaurants, natural products or environmentally friendly businesses. It suggests honesty and authenticity. Turn brown into gold, and it conveys wealth and quality.
Color is complex, involving not only the color itself but also its intensity and warmth. To get the effect you want, it’s worth enlisting the services of a graphic designer who can help you choose the right color combinations for your marketing goals.
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10 Benefits of Business Planning for all Businesses
It's a shame that so many people think business plans are just for startups, or to back up loan applications, or for getting investors. The truth is that business planning offers serious benefits for everybody in business.
And I'd like to point out that none of these benefits require a big formal business plan document. A lean business plan (as in What Business Plan Type is Best for Me) is usually enough. It takes an hour or two to do the first plan, then just an hour or two to review and revise monthly.
Here are those top ten benefits.
- See the whole business. Business planning done right connects the dots in your business so you get a better picture of the whole. Strategy is supposed to relate to tactics with strategic alignment. Does that show up in your plan? Do your sales connect to your sales and marketing expenses? Are your products right for your target market? Are you covering costs including long-term fixed costs, product development, and working capital needs as well? Take a step back and look at the larger picture.
- Strategic Focus. Startups and small business need to focus on their special identities, their target markets, and their products or services tailored to match.
- Set priorities. You can't do everything. Business planning helps you keep track of the right things, and the most important things. Allocate your time, effort, and resources strategically.
- Manage change. With good planning process you regularly review assumptions, track progress, and catch new developments so you can adjust. Plan vs. actual analysis is a dashboard, and adjusting the plan is steering.
- Develop accountability. Good planning process sets expectations and tracks results. It's a tool for regular review of what's expected and what happened. Good work shows up. Disappointments show up too. A well-run monthly plan review with plan vs. actual included becomes an impromptu review of tasks and accomplishments.
- Manage cash. Good business planning connects the dots in cash flow. Sometimes just watching profits is enough. But when sales on account, physical products, purchasing assets, or repaying debts are involved, cash flow takes planning and management. Profitable businesses suffer when slow-paying clients or too much inventory constipate cash flow. A plan helps you see the problem and adjust to it.
- Strategic alignment. Does your day-to-day work fit with your main business tactics? Do those tactics match your strategy? If so, you have strategic alignment. If not, the business planning will bring up the hidden mismatches. For example, if you run a gourmet restaurant that has a drive-through window, you're out of alignment.
- Milestones. Good business planning sets milestones you can work towards. These are key goals you want to achieve, like reaching a defined sales level, hiring that sales manager, or opening the new location. We're human. We work better when we have visible goals we can work towards.
- Metrics. Put your performance indicators and numbers to track into a business plan where you can see them monthly in the plan review meeting. Figure out the numbers that matter. Sales and expenses usually do, but there are also calls, trips, seminars, web traffic, conversion rates, returns, and so forth. Use your business planning to define and track the key metrics.
- Realistic regular reminders to keep on track. We all want to do everything for our customers, but sometimes we need to push back to maintain quality and strategic focus. It's hard, during the heat of the everyday routine, to remember the priorities and focus. The business planning process becomes a regular reminder.
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Is Your Small Business Mobile Ready?
More and more people are browsing, shopping, and doing business on their phones and tablets. Currently, 11.3% of the digital population uses mobile only, compared to 10.6% desktop only use*. This may not seem significant now but these numbers will continue to grow as mobile capabilities advance and mobile devices become more and more integral to day-to-day life. Seriously, if you are not mobile ready you are missing an opportunity to connect with mobile users who may be future customers and partners.
So how do you get started? You see, mobile is really about your audience. Here are some tips to help you get started.
Optimize Your Website
There are simple steps that you can take to optimize your website. Not all devices have flash capability. Not using it or working with a flash alternative will make your site more compatible with all mobile devices. Extremely high-resolution photos and colored backgrounds can also hinder viewing. Optimize your photos for the web, so that they don’t take forever to load. Chances are your audience is not going to wait for that. In the same vain colored backgrounds can hinder, not help the image download process, so keep it simple.
Now as far as responsive vs. adaptive, that really depends on what your users are coming to your mobile site for. (More about personas below). If you are going with adaptive you’ll need user personas to understand where and what content to put on your mobile site.
Keep Online Listings Up-to-Date
When I’m not in front of my computer the first thing that I do when I’m looking for a restaurant, shop, or business referral is check out online reviews.
Make sure you update all your business directory listings to include a simple description of your services, your hours of operation, your phone number, your address and a link to your website. Additionally if there are any other industry specific databases, make sure that your information is uploaded there as well.
Mobile users have different goals and content priorities than desktop users and many times they prefer different content formats than desktop users. Putting together personas will help inform your mobile strategy. As previously mentioned if you are using an adaptive template, user personas are essential for ensuring you have the right content. Your mobile site analytics should also inform your content decisions as well.
Take a look at your contacts and identify trends about how they find and consume your content. Did they request a quote through your website? Were they referred through a friend? Or did they find you online? Your website analytics will also help you sort out these questions.
When creating forms for your website, use form fields that will help you capture important persona information. Take into consideration your sales team's feedback on the leads they're interacting with most. What generalizations can they make about the different types of customers you serve best?
Once you have all this information, identify patterns and use the personas to tailor your content.
*Source: comScore Media Metrix Multi-Platform, March 2015 (Traffic data captured by the platform)
Franchises That Have It All
When looking for a franchise to buy, it’s important to find one that has it all. But, what does it mean to “have it all.” I’ll show you.
The Franchise Model
Franchising has been called the greatest business model ever invented, and with good reason.
It’s a wonderful way for people who’ve always wanted to be their own boss to do to so by leveraging someone else’s proven (hopefully) business system.
A lot of things go into a business system; especially one that is replicable by hundreds and sometimes even thousands of others. Let’s look at a few of them.
It all starts with quality. If the franchise you’re interested in offers a high-quality product or service, it’s much easier to get customers in the door. It’s also a lot easier to keep them coming back for more.
Product or service consistency is also important. It’s a big part of what makes franchising so successful.
A franchise that consistently offers a great product/service is a franchise I’d want to look into.
All of the locations of the franchise you’re investigating should have the same look and feel. It goes into branding, and it’s what makes the business itself so replicable.
Good franchise research needs to include in-person visits with existing franchisees of the concept you’re interested in, so you can find out for yourself if the same look and feel exists. It’s a great way to see the franchise operation in action-one you could eventually own and operate. It’s also a wonderful way to check out the franchisors’ branding. You’ll be able to see first-hand if it’s consistent, which is another advantage franchising offers.
Strong System Technology
Today’s franchisors need to have robust technology in place to help them with things like:
- Internal communication
- Online training
- System-wide sales tracking
- Franchise development
- Online marketing initiatives
Franchisors also need to make sure that their system technology is secure at headquarters and in each franchisees’ place of business.
When you’re out visiting franchisees ask them what they think about the technology that’s in place. After all, it’s part of what they’re paying for, and what you’ll be paying for if you become an owner.
Smart Executive Team
Travelling to franchise headquarters is a great way to see things in action; most franchisors require prospective franchisees to visit in-person as part of the franchisee approval process.
Formally called a “Discovery Day,” this day-long visit with the executive team at headquarters is a crucial part of the investigative process. It’s really where the rubber meets the road. There’s usually time for prospective franchisees to sit down with members of team-including the CEO. It’s a great time for you to ask about the state of their company and their vision for the future. You’ll quickly find out how smart* they are if you listen closely.
Having It All
No franchise operation is perfect. No franchise really has it all. Just find the best all-around one that fits what you want in a business.
As you look around at the different franchise opportunities that are available, try to find out (through research) how good they are in different areas.
Do they offer a great product or service?
Do they have a powerful brand-or are they at least well on their way to doing so?
Are franchisees satisfied with the technology they have access to?
Are the franchise executives smart? Innovative?
Does the company seem to be a well-oiled machine?
The best way to take advantage of franchising-as a business model, is to choose a franchise opportunity that excels in a significant amount of the things needed to run a successful franchise operation today.
If you can find one like that, maybe you can have it all.
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5 Ways to Target the Right Audience
What is a business without customers? The most important step in business planning is finding out who your customers are, what their needs are, and why they want to buy from you. Is the market right for you? Are you targeting the right customers? Do they identify with your value proposition and your brand promise? If you don’t know the answers to these questions you may want to revisit the planning stage.
1) Be clear about whom you are and your unique value proposition
Sounds obvious, but more than just a product or service, what are you really selling? What problem are you solving and why would your product or service resonate with your customers? What unique benefits do you offer? This is what you must lock down in your brand promise.
Think about it. Take a look at some of the businesses and brands that you resonate with. What about their brand keeps you coming back for more? Certainly you have other options to choose from, so what is it that keeps you coming back for more, what is their unique benefit? What they are really selling is a combination of product, value, ambience (or not), and brand experience.
Take a look at this blog about the power of emotional marketing. This blog offers tips on how you can develop and capitalize on these elements of value.
2) Stay Focused
One of the pitfalls of not defining what you have to offer is that you can quickly become a jack-of-all-trades and master of none. This can have a negative impact on business growth.
Think about it from the perspective of a consumer. How often do you see marketing flyers promoting the service of a local handy man who claims to be an expert in everything from drywall installation to plumbing repairs, and so on? Or the restaurant that offers Chinese food, pizza, and subs. You wouldn’t choose either of these, because they have no specialty. You’ll win a lot more business with a strong strategic focus on something specific.
3) Identify Your Niche
The flip side of being a jack-of-all-trades is finding your niche and playing to your strengths within that niche. Creating a niche for your business is essential to success. For example, say you want to quit your day job and become a freelance writer. You know there’s a need in the market for a trustworthy, reliable, and consistently good technical writer – and clients are willing to pay a certain price point for that quality and value.
Now you could simply advertise your services on an online freelance marketplace, as many do, and hope to pick up any business from any customer anywhere on the map. But by identifying your niche and choosing to attract customers who will value your services, you will quickly build on that niche and be on the path towards business success.
4) Find Your Target Customer
Identifying and finding your ideal target customer is a process few businesses can’t afford to get wrong. A few simple steps can help get you along the way and are covered here in this SBA guide: Identifying Your Target Market.
5) Tailor your brand promise
Now that you’ve identified your target market you’ll need to craft a message that reaches and speaks to that market while reinforcing your brand identity. It not only explains what you have to offer, why you’re different, and why anyone should buy from you, but it should communicate the promise you’re making the customer. This promise speaks to the integrity of your business.
The moral of the story is be clear, be specific, and communicate your unique value. Here are some additional resources to help you on your way.
Established business owners: how did you establish your target market? What are some of the lessons you learned?